The Press FRIDAY, JUNE 10, 1938. A Guaranteed Prices Tribunal

Press, Volume LXXIV, Issue 22424, 10 June 1938, Page 12

The Press FRIDAY, JUNE 10, 1938. A Guaranteed Prices Tribunal

Wisely, from his own point of view and that of the Government, the Prime Minister has decided to grant the request of the New .Zealand Farmers’ Union that the guaranteed price for dairy produce should be fixed by a tribunal presided over by a judge of the Supreme Court. The Prime Minister no doubt feels, and has every justification for feeling, that in the administration of the guaranteed prices scheme the Government has >een generous to the dairy farmers, so generous, indeed, that the scheme has become a potential menace to the stability of the national finances. As we pointed out a few days ago, the guaranteed prices scheme was originally intended to be a means of ironing out price fluctuations, surpluses in good years being used to offset deficits in bad years. In practice, it has turned out to be an involved method of subsidising dairy exports, , Bast season there was a deficit of £300,000 in the Dairy Industry Account; and according to the Minister for Finance that amount has now been transferred to another account and will be a charge, not on the dairy industry, but on the country as a whole. This season there is already a surplus of £600,000; and dairy farmers have been given an unqualified assurance that this amount, and any more that may accumulate, will be distributed to them, presumably in the form of a bonus. Nevertheless, the dairy farmers are not satisfied and are loudly proclaiming that the Government has not honoured its promise to give them economic justice. In the circumstances, it is hardly surprising that the Prime Minister should eagerly accept a proposal by the Farmers’ Union to hand over the administration of the scheme to a non-political tribunal. Whether the dairy farmers, on mature reflection, will be pleased at the turn events are taking, and whether they will endorse the claim of the Farmers’ Union to speak on their behalf, are questions not of immediate concern. What is important to note at the moment is that, before the Government hands over the guaranteed prices scheme to an independent tribunal to administer, it will have to decide exactly what the scheme is. The formula for determining the guaranteed price laid down in. the Primary Products Marketing Act is far too vague to be handed over for interpretation to a body which will presumably function in a semi-judicial manner. Moreover, it will also be necessary to determine with precision the principles which are to govern the management of the Dairy Industry Account. It must be understood by the dairy farmers that, if they desire and are. granted an independent tribunal to fix the guaranteed price, that price must be accepted as having the same finality as the pronouncements of the Arbitration Court on wages. If the dairy farmers are to consider themselves free to agitate for a.higher price, and if the Government is to consider itself free to pay bonuses in addition to the price declared, then the tribunal will be merely a farce. It is probable that the community as a whole will be no less anxious than the Government to make the change suggested by the Farmers’ Union. It seems to offer an excellent opportunity to rid the guaranteed prices scheme of the many objectionable features it has acquired owing to political pressure and to restore the original and sound .'conception of a price equalisation scheme. The possibilities are, however, that the dairy farmers will recognise that a bluff has been called and will prefer to adhere to a system which leaves them free to address themselves directly to the Government.